Share this:

There was a lot to talk about on the beaches that dot the eastern Caribbean last week — from the chaos in Cyprus to new highs for the Dow — but among the fast-money financial set enjoying spring break with their families, the talk inevitably turned to just one topic: JCPenney and the misadventures of its CEO, Ron Johnson, and his consigliere and investor Bill Ackman.

The schadenfreude was as thick as the layers of Lancaster sunscreen being applied on the beaches of St. Barts. The buzz centered on a familiar theme: that Johnson was an over-rated and arrogant retailer and that Ackman — being Ackman — couldn’t see beyond his own hubris.

But there was something more — the sense that Steve Jobs wasn’t getting proper recognition for the phenomenal success of the Apple Store concept (often credited to Johnson during his time at Apple) and that untethered from Jobs’ brain, Johnson was just another grunt retailer.

Wall Street is clearly gunning for Ackman big time, despite the fact that there is very little financial gain to be had from Johnson’s or Penney’s demise. Sure, there are rumors that there is a “book” making the rounds to sell Penney, but with a market value of just $3.4 billion and falling, any mergers and acquisitions fees would be small potatoes. In fact, those making some of the harshest comments could probably finance a Penney takeover on their own dime.

Of course, all this has little to do with the pedestrian retailer, but very much with how Ackman could be so dense as to double down on a retail bet after his disastrous foray into Target stock a few years ago.

At least the denizens of Wall Street were familiar with Target (their families occasionally shopped there), but JCPenney? A Joe Fresh store-within-a-store? What is Team Johnson thinking? When it comes to Penney’s merchandising decisions, the 1 percent and the 99 percent seem to be in rare agreement: The store makeovers don’t make sense.

Little wonder Penney was forced to say in its annual report last week that it can no longer assure that it can “successfully implement our strategic initiatives” (i.e., Johnson’s “vision”).

Johnson has a friendly board and Ackman on his side. But it is certainly starting to look like the retailing emperor has no clothes — except of course all those JCPenney duds hanging in his walk-in closet.